Economic Insights
Employment Rates and Wages of Core-aged Workers in Canada and the United States, 2000 to 2017

by André Bernard and René Morissette
Analytical Studies Branch, Statistics Canada

Release date: June 4, 2018

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This Economic Insights article assesses how employment rates and wages of persons aged 25 to 54 evolved in Canada and the United States from 2000 to 2017. The analysis is based on data from Statistics Canada’s Labour Force Survey (LFS), and on the U.S. Bureau of Labor Statistics’ Current Population Survey (CPS). The study finds that employment rates and real median hourly wages of core-aged workers evolved more favourably in Canada than in the United States during this period.

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Introduction

The Canadian and U.S. labour markets have experienced several structural and cyclical changes of a similar nature since 2000. Both countries witnessed a contraction of their information and communication technologies (ICT) sector in the early 2000s, a decline in manufacturing employment and unionization, an expansion of their oil and gas industries during the oil boom of the 2000s, and an adjustment in construction activities during the last recession.

Some of these changes have been of similar magnitudes in both countries. For example, the unionization rate of employees aged 25 to 54 fell by roughly 4 percentage points in Canada and the United States from 2000 to 2017, albeit from different levels (Chart 1). Manufacturing employment declined by about 25% in both countries during that period (Chart 2).

However, the magnitude of other shocks has differed, often substantially. As the last recession unfolded, the housing market and construction industry were more severely impacted in the United States than in Canada. By the first quarter of 2009, housing starts in the United States were down nearly 67% from early 2007 levels, compared with roughly 39% in Canada. Housing starts in Canada rebounded at a faster pace, surpassing pre-recession levels by the third quarter of 2011. In contrast, housing starts in the United States were still below pre-recession levels in 2017.Note 1

Another important difference between the two countries is the relatively larger role that the oil and gas sector has played in the Canadian economy. In 2014, oil and gas extraction accounted for 5.9% of gross domestic product (in current dollars) in Canada, compared with 1.9% in the United States.Note 2 While employment in oil and gas extraction and peripheral activitiesNote 3 accounted for 0.6% of total employment in the U.S. that year, it accounted for 1.3% of total employment in Canada. Since oil and gas industries are relatively more important in Canada than they are in the United States, rising and subsequently falling world oil prices may have had more far reaching effects in Canada than in the United States through of a variety of economic spillovers.Note 4

For these reasons, employment rates and wages might have evolved differently in the two countries since the early 2000s. Using data from Statistics Canada’s Labour Force Survey (LFS) and the U.S. Bureau of Labor Statistics’ Current Population Survey (CPS), the study documents movements in employment rates and wages of Canadian and American workers aged 25 to 54. Because wage and employment movements may have differed for highly educated workers and their less educated counterparts, the analysis document these trends for three groups of individuals: (a) those with a high school education or less, (b) those with some post-secondary qualification below a bachelor’s degree, (c) those with a bachelor’s degree or higher education (henceforth, bachelor’s degree). The study covers the 2000-to-2017 period.

Data table for Chart 1

Data table for Chart 1
Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1. The information is grouped by Year (appearing as row headers), Canada and United States, calculated using percent units of measure (appearing as column headers).
Year Canada United States
percent
2000 36.1 16.5
2001 35.9 16.3
2002 35.8 16.0
2003 35.5 15.6
2004 35.0 15.2
2005 35.2 14.9
2006 34.8 14.3
2007 34.8 14.3
2008 34.2 14.7
2009 34.1 14.4
2010 34.1 14.0
2011 33.6 13.8
2012 33.8 13.2
2013 33.9 13.3
2014 33.1 13.1
2015 33.5 13.0
2016 32.9 12.7
2017 32.7 12.7

Data table for Chart 2

Data table for Chart 2
Data table for Chart 2
Table summary
This table displays the results of Data table for Chart 2. The information is grouped by Year (appearing as row headers), Canada and United States, calculated using index (2000=100) units of measure (appearing as column headers).
Year Canada United States
index (2000=100)
2000 100.0 100.0
2001 99.1 93.9
2002 102.1 87.2
2003 101.6 85.9
2004 102.5 83.8
2005 98.3 82.9
2006 93.8 83.7
2007 90.3 82.2
2008 86.0 80.9
2009 77.8 72.6
2010 76.3 71.1
2011 76.8 72.7
2012 77.9 74.5
2013 76.8 75.8
2014 76.3 74.0
2015 76.4 74.2
2016 75.6 75.4
2017 76.9 74.8

Employment rates

From 2000 to 2017, the employment rates of individuals aged 25 to 54 evolved more favourably in Canada than in the United States. During that period, the percentage of individuals employed fell slightly in the United States―dropping from 81% in 2000 to 79% in 2017―but increased by the same amount in Canada, rising from 80% in 2000 to 82% in 2017. This does not simply reflect the fact that the last recession was more severe in the United States. As Chart 3 shows, employment rates were diverging prior to 2008. From 2000 to 2007, employment rates of persons aged 25 to 54 increased by 2 percentage points in Canada but showed no growth in the United States.

Data table for Chart 3

Data table for Chart 3
Data table for Chart 3
Table summary
This table displays the results of Data table for Chart 3. The information is grouped by Year (appearing as row headers), Canada and United States, calculated using percent units of measure (appearing as column headers).
Year Canada United States
percent
2000 79.9 81.4
2001 79.8 80.6
2002 80.3 79.3
2003 80.8 78.8
2004 81.3 79.0
2005 81.3 79.4
2006 81.6 79.8
2007 82.2 80.0
2008 82.3 79.1
2009 80.3 75.8
2010 80.5 75.1
2011 81.0 75.2
2012 81.4 75.8
2013 81.6 75.9
2014 81.2 76.7
2015 81.4 77.2
2016 81.4 78.0
2017 82.3 78.7

These diverging trends in employment rates were the most pronounced among individuals without a bachelor’s degree. For example, employment rates of women with a postsecondary education below a bachelor’s degree rose 3 percentage points in Canada but fell 5 percentage points in the United States from 2000 to 2017 (Table 1). Employment rates of women with a high school education or less were about the same in 2000 and 2017 in Canada but dropped by 7 percentage points in the United States during that period. In contrast, employment rates of female bachelor degree holders changed little from 2000 to 2017 in both countries. More favourable changes in employment rates were also observed among Canadian men without a bachelor’s degree, especially those with a postsecondary education below a bachelor’s degree. Hence, while employment rates evolved in a fairly similar fashion in both countries for bachelors’ degree holders (Chart 4), they followed different trajectories for individuals without a bachelor’s degree (Chart 5).

Data table for Chart 4

Data table for Chart 4
Data table for Chart 4
Table summary
This table displays the results of Data table for Chart 4. The information is grouped by Year (appearing as row headers), Men, United States, Women, United States, Men, Canada and Women, Canada, calculated using percent units of measure (appearing as column headers).
Year Men, United States Women, United States Men, Canada Women, Canada
percent
2000 94.3 81.2 90.8 83.2
2001 93.8 80.1 89.7 82.8
2002 92.6 80.0 89.3 82.6
2003 92.1 79.6 88.6 81.6
2004 92.5 79.4 89.6 82.6
2005 92.6 80.4 89.6 82.8
2006 93.5 80.9 90.6 83.0
2007 93.5 80.7 90.3 83.6
2008 92.8 81.0 90.2 82.9
2009 90.5 79.6 88.6 82.9
2010 90.4 78.8 88.8 82.5
2011 90.7 78.9 89.1 82.9
2012 91.3 79.1 89.6 83.3
2013 91.1 79.2 89.4 83.7
2014 91.6 79.9 89.0 83.2
2015 91.9 80.2 89.9 83.1
2016 91.9 80.7 89.9 83.2
2017 92.2 81.4 90.9 84.2

Data table for Chart 5

Data table for Chart 5
Data table for Chart 5
Table summary
This table displays the results of Data table for Chart 5. The information is grouped by Year (appearing as row headers), Men, United States, Women, United States, Men, Canada and Women, Canada, calculated using percent units of measure (appearing as column headers).
Year Men, United States Women, United States Men, Canada Women, Canada
percent
2000 86.7 71.4 84.5 71.5
2001 85.6 70.8 84.1 72.0
2002 84.0 69.0 84.0 73.3
2003 83.2 68.7 84.8 74.3
2004 83.9 68.5 84.9 74.9
2005 84.5 68.4 85.1 74.4
2006 84.8 68.6 84.8 74.8
2007 84.9 68.7 84.9 76.2
2008 82.9 68.2 85.4 76.1
2009 77.6 65.6 81.8 74.9
2010 76.8 64.5 82.2 74.8
2011 77.5 63.9 83.3 74.7
2012 78.7 64.0 83.5 75.1
2013 79.0 63.7 83.6 75.4
2014 79.9 64.3 83.5 74.6
2015 80.5 64.3 83.4 74.5
2016 81.4 65.2 82.9 74.6
2017 81.8 66.0 83.8 75.2
Table 1
Employment rate of individuals aged 25 to 54, by sex and education level, Canada and the United States, selected years
Table summary
This table displays the results of Employment rate of individuals aged 25 to 54. The information is grouped by Education level and year (appearing as row headers), Men, Women, Canada and United States, calculated using percent and percentage points units of measure (appearing as column headers).
Education level and year Men Women
Canada United States Canada United States
percent
High school education or less
2000 80.3 84.6 64.2 66.7
2007 80.6 82.7 68.3 63.2
2011 78.4 74.8 65.4 58.0
2017 78.3 79.4 64.3 59.3
   percentage points
Change
2000 to 2007 0.3 -1.9 4.1 -3.5
2007 to 2011 -2.1 -7.9 -2.9 -5.2
2011 to 2017 -0.1 4.6 -1.0 1.3
2000 to 2017 -1.9 -5.2 0.2 -7.4
   percent
Postsecondary education below bachelor's degree
2000 88.2 90.3 78.0 78.2
2007 88.2 88.6 81.6 76.0
2011 86.8 81.9 80.4 71.2
2017 87.4 85.5 81.1 73.5
   percentage points
Change
2000 to 2007 -0.1 -1.6 3.6 -2.1
2007 to 2011 -1.4 -6.8 -1.2 -4.9
2011 to 2017 0.7 3.6 0.7 2.4
2000 to 2017 -0.8 -4.8 3.0 -4.6
percent
Bachelor's degree
2000 90.8 94.3 83.2 81.2
2007 90.3 93.5 83.6 80.7
2011 89.1 90.7 82.9 78.9
2017 90.9 92.2 84.2 81.4
   percentage points
Change
2000 to 2007 -0.4 -0.8 0.4 -0.5
2007 to 2011 -1.2 -2.8 -0.7 -1.8
2011 to 2017 1.8 1.5 1.3 2.5
2000 to 2017 0.2 -2.1 1.0 0.2

What accounts for these different trends among individuals without a bachelor’s degree? Charts 6 and 7 provide descriptive evidence on this question for male workers. Chart 6 shows that the share of Canadian men without a bachelor’s degree employed in manufacturing declined substantially from 2000 to 2017, but that the share employed in construction rose significantly over the same period. As a result, the percentage of Canadian men aged 25 to 54 without a bachelor’s degree who were employed in either manufacturing or construction fell only slightly.

This was not the case in the United States. While the share of men employed in manufacturing declined quite steadily from 2000 to 2017, the construction sector did not play an offsetting role. After rising from 2000 to 2007, the share of American men employed in construction fell through the 2007-2009 U.S. recession and by 2017 had only recovered to levels last observed in 2000 (Chart 7). Overall, the share of American men aged 25 to 54 without a bachelor’s degree who were employed in either manufacturing or construction fell from about one-third in 2000 to about one-quarter in 2017.Note 5

The different trends in the share of less educated men employed in construction resulted from the different employment trajectories observed in the two countries in this sector. While employment in construction increased 75% in Canada from 2000 to 2017, it was, by 2017, only 9% higher than in 2000 in the United States (Chart 8). 

Data table for Chart 6

Data table for Chart 6
Data table for Chart 6
Table summary
This table displays the results of Data table for Chart 6. The information is grouped by Year (appearing as row headers), Construction, Manufacturing and Construction and manufacturing, calculated using percent units of measure (appearing as column headers).
Year Construction Manufacturing Construction and manufacturing
percent
2000 9.6 20.1 29.7
2001 9.8 19.9 29.8
2002 10.0 20.0 30.0
2003 10.4 20.0 30.3
2004 10.5 19.9 30.4
2005 11.3 18.9 30.2
2006 11.6 17.9 29.5
2007 12.0 16.7 28.7
2008 13.2 16.1 29.3
2009 12.8 14.5 27.2
2010 13.3 14.3 27.6
2011 14.0 14.1 28.1
2012 14.2 14.3 28.5
2013 14.7 13.8 28.5
2014 14.5 13.6 28.0
2015 14.7 13.2 27.9
2016 15.3 12.5 27.8
2017 15.2 12.9 28.1

Data table for Chart 7

Data table for Chart 7
Data table for Chart 7
Table summary
This table displays the results of Data table for Chart 7. The information is grouped by Year (appearing as row headers), Construction, Manufacturing and Construction and manufacturing, calculated using percent units of measure (appearing as column headers).
Year Construction Manufacturing Construction and manufacturing
percent
2000 14.3 18.8 33.1
2001 14.6 17.6 32.2
2002 14.3 16.7 31.0
2003 14.4 16.0 30.4
2004 15.3 15.3 30.6
2005 15.7 14.8 30.6
2006 16.4 14.9 31.3
2007 16.5 14.4 30.9
2008 15.3 14.0 29.3
2009 13.4 12.4 25.8
2010 12.7 12.2 24.9
2011 12.5 12.2 24.7
2012 12.4 12.3 24.7
2013 12.9 12.3 25.2
2014 13.8 12.0 25.7
2015 13.8 12.1 25.9
2016 14.2 11.9 26.2
2017 14.4 11.6 26.0

Data table for Chart 8

Data table for Chart 8
Data table for Chart 8
Table summary
This table displays the results of Data table for Chart 8. The information is grouped by Year (appearing as row headers), Canada and United States, calculated using index (2000=100) units of measure (appearing as column headers).
Year Canada United States
index (2000=100)
2000 100.0 100.0
2001 101.9 102.9
2002 107.0 100.4
2003 112.9 102.7
2004 118.3 109.6
2005 126.7 114.0
2006 132.2 119.4
2007 139.7 120.8
2008 153.2 111.1
2009 147.4 98.9
2010 153.9 92.9
2011 160.4 92.5
2012 163.9 91.0
2013 169.8 94.4
2014 170.0 100.4
2015 169.9 101.3
2016 171.6 105.4
2017 174.6 108.7

Overall, Charts 6 and 7 suggest that differential movements in the shares of men employed in construction in Canada and the U.S. contributed to the divergence of male employment rates in the two countries. Table 2 provides further evidence on this question. It shows that the employment rates of Canadian and American men without a bachelor’s degree fell by 0.7 and 5.0 percentage points, respectively, from 2000 to 2017. The 4.2-percentage-point difference in employment rate changes is entirely accounted for by divergences in the shares of men employed in construction. While the share of Canadian men employed in construction increased by 5.6 percentage points, the share of American men rose marginally (0.1 percentage points).

The larger increase in the share of men employed in mining and oil and gas extraction observed in Canada―0.8 percentage point, compared with 0.2 percentage point in the Unites States― accounts for 12%Note 6 of the difference in the overall change in the employment rate of men. Consistent with Chart 2, differential movements in the shares of men employed in manufacturing did not contribute to the divergence in employment rates, as the share of men employed in manufacturing fell no more in the United States than it did in Canada.

Table 2 also sheds light on the different trends in employment rates observed among Canadian and American women without a bachelor’s degree. Employment rates increased by 3.8 percentage points among Canadian women while they declined by 5.4 percentage points among their American counterparts. Of the 9.2-percentage-point difference in the overall change in the employment rate of women, 3.9 percentage points—or 42%—is attributable to a larger increase in the share of Canadian women employed in educational services, health care and social assistance. Another 11% is accounted for by the larger decline in the share of American women employed in manufacturing.

It is important to emphasize that the numbers shown in Table 2 result from an accounting exercise. They do not take into consideration spillover effects, such as the extent to which higher employment of Canadian men in construction was driven by economic activity generated by the oil and gas sector. Hence, the causal impact of mining, oil and gas extraction on employment rate movements among men is likely to be greater than the 12% reported above.

The results presented so far reflect national averages and mask potentially important regional variation. As Table 3 shows, employment rate movements in Canada were not uniform across provinces. While employment rates of Canadian men without a bachelor’s degree fell by 0.7 percentage point from 2000 to 2017 nationwide, they fell by about 4 percentage points in Ontario and Alberta but rose slightly in Newfoundland and Labrador, Prince-Edward-Island, New Brunswick, Quebec and British Columbia. Likewise, employment rates of Canadian women with no bachelor’s degree increased by 3.8 percentage points from 2000 to 2017 nationwide, rose by about 12 percentage points in Quebec as well as Newfoundland and Labrador but showed no growth in Ontario, Manitoba, Saskatchewan and Alberta.

Movements in employment rates were more uniform across the United States. Regardless of the region considered, employment rates of men without a bachelor’s degree fell by between 4 and 6 percentage points from 2000 to 2017 (Table 4). The employment rates of their female counterparts dropped by between 3 and 7 percentage points during that period.

Given the importance of workers without a bachelor’s degree in explaining the overall differences in long-term trends in employment rates between Canada and the United States, a visual summary of Canada-U.S. differences in employment and wages for workers without a bachelor’s degree has been prepared. The infographic “A Canada-U.S. Comparison of Employment and Wages” is available in Statistics Canada — Infographics (11-627-M).

Table 2
Changes in employment shares of men and women aged 25 to 54, without a bachelor's degree, by industry, Canada and United States, 2000 to 2017
Table summary
This table displays the results of Changes in employment shares of men and women aged 25 to 54 Men, Women, Change between
2000 and 2017, Difference, Canada and United States, calculated using percentage points units of measure (appearing as column headers).
Men Women
Change between
2000 and 2017
Difference Change between
2000 and 2017
Difference
Canada United States Canada United States
percentage points
Changes in employment shares
Agriculture, forestry, fishing and hunting -1.5 -0.3 1.2 -0.6 -0.1 0.5
Mining, quarrying and oil and gas extraction 0.8 0.2 -0.5 0.1 0.0 -0.1
Construction 5.6 0.1 -5.5 0.8 -0.3 -1.1
Manufacturing -7.2 -7.2 -0.1 -3.0 -4.0 -1.0
Wholesale trade and retail trade -0.2 -0.8 -0.6 0.2 -1.2 -1.5
Finance, insurance and real estate 0.1 0.1 0.0 -0.8 -1.2 -0.4
Educational services, health care and social assistance 0.2 0.6 0.4 4.8 1.0 -3.9
Accommodation and food services 1.0 1.3 0.3 1.0 1.4 0.5
Public administration -0.4 -0.1 0.3 -0.1 -0.7 -0.6
Other services 0.9 1.2 0.3 1.2 -0.4 -1.6
Changes in employment rate -0.7 -5.0 -4.2 3.8 -5.4 -9.2
Table 3
Employment rate of individuals aged 25 to 54, with no bachelor's degree, by province, Canada, selected years
Table summary
This table displays the results of Employment rate of individuals aged 25 to 54 2000, 2007, 2011, 2017 and Change
2000 to 2017, calculated using percent and percentage points units of measure (appearing as column headers).
2000 2007 2011 2017 Change
2000 to 2017
percent percentage points
Men
Newfoundland-and-Labrador 66.4 70.0 72.4 67.5 1.0
Prince-Edward-Island 77.6 79.2 77.2 79.3 1.7
Nova Scotia 78.3 79.5 79.1 77.6 -0.7
New Brunswick 76.4 78.5 78.5 78.5 2.1
Québec 81.4 82.1 82.0 84.5 3.1
Ontario 87.2 84.5 82.8 82.9 -4.3
Manitoba 88.6 89.3 87.9 86.2 -2.5
Saskatchewan 87.7 90.3 89.2 85.4 -2.3
Alberta 89.7 92.0 88.6 86.0 -3.7
British Columbia 83.0 87.0 82.6 86.1 3.1
All provinces 84.5 84.9 83.3 83.8 -0.7
Women
Newfoundland-and-Labrador 56.2 65.0 68.2 68.9 12.7
Prince-Edward-Island 72.9 76.6 76.9 74.4 1.6
Nova Scotia 66.9 73.9 74.8 75.8 8.9
New Brunswick 66.6 74.5 73.9 76.0 9.4
Québec 67.9 76.4 76.7 79.8 11.9
Ontario 73.4 76.4 73.7 73.0 -0.4
Manitoba 77.1 78.2 76.8 75.4 -1.6
Saskatchewan 77.0 80.1 77.4 75.7 -1.2
Alberta 76.0 78.1 75.7 73.2 -2.8
British Columbia 70.8 74.8 73.2 76.3 5.5
All provinces 71.5 76.2 74.7 75.2 3.8
Table 4
Employment rate of individuals aged 25 to 54, with no bachelor's degree, by region, United States, selected years
Table summary
This table displays the results of Employment rate of individuals aged 25 to 54 2000, 2007, 2011, 2017 and Change
2000 to 2017, calculated using percent and percentage points units of measure (appearing as column headers).
2000 2007 2011 2017 Change
2000 to 2017
percent percentage points
Men
New England 87.6 84.4 77.8 83.5 -4.1
Middle Atlantic 84.7 83.4 77.3 79.7 -5.0
East North Central 87.4 83.7 76.6 81.1 -6.3
West North Central 88.9 86.3 81.1 85.0 -3.9
South Atlantic 87.4 85.4 76.2 81.6 -5.9
South Central 85.8 84.6 78.9 81.1 -4.7
Mountain 88.9 87.6 77.7 84.7 -4.2
Pacific 85.9 85.2 76.6 81.8 -4.1
All regions 86.7 84.9 77.5 81.8 -5.0
Women
New England 76.4 72.5 69.3 70.2 -6.2
Middle Atlantic 68.9 68.0 63.5 65.5 -3.4
East North Central 73.8 70.4 65.0 67.7 -6.2
West North Central 79.5 77.1 73.6 74.4 -5.1
South Atlantic 73.2 70.5 65.1 66.0 -7.3
South Central 68.6 65.1 60.7 63.4 -5.2
Mountain 70.8 69.5 63.7 65.5 -5.3
Pacific 67.6 65.0 60.5 63.9 -3.7
All regions 71.4 68.7 63.9 66.0 -5.4
Table 5
Growth in real median hourly wages, employees aged 25 to 54, by sex and education, Canada and the United States, 2000 to 2017
Table summary
This table displays the results of Growth in real median hourly wages Canada, United States and Canada to United States difference, calculated using percent and percentage points units of measure (appearing as column headers).
Canada United States United States to Canada difference
percent percentage points
Men
High school education or less 0.7 -6.4 -7.1
Post-secondary education below bachelor's degree 5.8 -9.4 -15.2
Bachelor's degree 3.5 2.0 -1.5
All education levels 7.4 -1.7 -9.1
Women
High school education or less 6.8 -0.7 -7.5
Post-secondary education below bachelor's degree 7.2 -7.1 -14.3
Bachelor's degree 7.5 -0.1 -7.6
All education levels 13.8 5.3 -8.5

Wages

The more favourable labour market trends observed in Canada were not limited to employment rates. From 2000 to 2017, real median hourly wages of employees aged 25 to 54 increased by about 9% in Canada compared to 3% in the United States (Chart 9).

Stronger wage growth was observed in Canada for men and women of all education levels. The Canada-U.S. difference in wage growth was especially pronounced among male and female employees with a postsecondary education below a bachelor’s degree (for example those with a college diploma or a university certificate below bachelor’s degree): it amounted to roughly 15 percentage points (Table 5). In contrast, real wage growth among Canadian male bachelor degree holders was only 2 percentage points higher than that of their U.S. counterparts.

Data table for Chart 9

Data table for Chart 9
Data table for Chart 9
Table summary
This table displays the results of Data table for Chart 9. The information is grouped by Year (appearing as row headers), Canada and United States, calculated using index (2000=100) units of measure (appearing as column headers).
Year Canada United States
index (2000=100)
2000 100.0 100.0
2001 98.8 101.1
2002 99.7 102.3
2003 99.4 103.9
2004 99.0 101.5
2005 100.7 99.8
2006 100.0 101.5
2007 101.7 100.2
2008 103.3 101.0
2009 106.6 102.2
2010 107.2 100.1
2011 104.1 98.3
2012 107.1 98.0
2013 106.6 98.8
2014 108.1 97.2
2015 109.7 99.7
2016 110.4 102.4
2017 108.7 102.7

Among male and female employees without a bachelor’s degree, real wage growth was generally stronger in Canada than in the United States in all industries.Note 7 The cross-country difference in wage growth amounted to 15 percentage points or more in three sectors: construction, mining, oil and gas extraction, and public administration (Table 6). In contrast, it amounted to only 2 percentage points for men employed in manufacturing.

As was the case for employment rate movements, wage changes were less uniform in Canada than in the United States. For example, real median hourly wages of men with no bachelor’s degree grew 23% or more in the three oil-producing provinces of Alberta, Saskatchewan and Newfoundland and Labrador but increased by only 2% in Ontario (Table 7). In contrast, real median hourly wages of American male workers with no bachelor’s degree fell by between 2% and 10%, depending on the region considered.

Table 6
Growth in real median hourly wages of men and women aged 25 to 54, without a bachelor's degree, by industry, Canada and United States, 2000 to 2017
Table summary
This table displays the results of Growth in real median hourly wages of men and women aged 25 to 54 Men, Women, Canada and United States, calculated using percent units of measure (appearing as column headers).
Men Women
Canada United States Canada United States
percent
Industry
Agriculture, forestry, fishing and hunting 2.5 13.7 17.3 3.0
Mining, quarrying and oil and gas extraction 26.4 4.4 25.9 -1.1
Construction 15.6 -2.2 20.3 5.3
Manufacturing -2.2 -4.0 10.2 0.6
Wholesale trade and retail trade 2.9 -6.4 18.7 1.4
Finance, insurance and real estate 4.2 -3.6 16.2 1.9
Educational services, health care and social assistance 9.3 -1.6 10.0 2.2
Accommodation and food services 10.6 2.1 20.6 7.5
Public administration 18.4 -5.1 17.7 -7.1
Other services 2.8 -8.9 7.2 -4.0
All industries 4.2 -5.5 9.3 1.1
Table 7
Growth in real median hourly wages of men and women aged 25 to 54, without a bachelor's degree, by region, Canada and United States, 2000 to 2017
Table summary
This table displays the results of Growth in real median hourly wages of men and women aged 25 to 54 Men and Women, calculated using percent units of measure (appearing as column headers).
Men Women
percent
Canada
Newfoundland-and-Labrador 29.7 35.1
Prince-Edward-Island 18.5 20.9
Nova Scotia 8.6 19.4
New Brunswick 1.9 19.8
Québec 7.9 14.3
Ontario 1.7 1.9
Manitoba 9.8 21.9
Saskatchewan 23.4 28.5
Alberta 26.1 28.8
British Columbia -1.2 2.5
All provinces 4.2 9.3
United States
New England -4.7 -4.3
Middle Atlantic -8.2 -3.6
East North Central -9.7 -3.1
West North Central -7.2 1.5
South Atlantic -5.1 -1.7
South Central -1.7 3.6
Mountain -4.8 3.4
Pacific -6.4 -3.8
All regions -5.5 1.1

Conclusion

The Canadian and U.S. labour markets have experienced a number of economic shocks since the early 2000s. The magnitude of some of these shocks has differed across the two countries, particularly with respect to the relatively larger negative adjustments in the U.S. housing market and construction industry, together with the positive impact of the resource sector in Canada.

As a result, this article shows that among individuals aged 25 to 54, both real wages and employment rates evolved more favourably in Canada than in the United States from 2000 to 2017. This largely reflects differing trends among workers without a bachelor’s degree in the two countries over this period.

The more favourable wage and employment rate movements observed in Canada at the national level mask important regional differences. For example, men without a bachelor’s degree residing in Ontario experienced declines in employment rates that were similar to those of their counterparts in many U.S. regions.

The factors that underlie the cross-country differences in these trends remain to be identified. Given the similarity and proximity of the two economies, labour-saving technological changes are unlikely to account for a substantial portion of these cross-country differences. Because the drop in manufacturing employment was―in percentage terms―roughly the same in both countries, it is also unlikely to explain much of these differences. Neither is the slight decline in unionization rate observed in both countries over the 2000-to-2017 period. Whether cross-country differences in the trajectories of real minimum wages, if any, played a role is currently unknown. Likewise, the degree to which the different magnitudes of the shocks experienced in the construction and resource sectors explain these cross-country differences has yet to be determined.

Appendix

Data sources

This article is based on data from Statistics Canada’s Labour Force Survey (LFS) and from the U.S. Bureau of Labor Statistics’ Current Population Survey (CPS).

The LFS and CPS are monthly household surveys. Their main purpose is to provide information on recent trends in employment and unemployment (Bender 2016; Bernard and Usalcas 2014). The monthly sample of the LFS is approximately 56,000 households, while that of the CPS is about 60,000 households. The monthly microdata for the 2000-to-2017 period were used to produce the annual data shown in this article.

The two surveys are mostly similar. There are minor conceptual differences between them, but most are related to the classification of respondents as either unemployed or out of the labour force. These differences are therefore unlikely to have an impact on an analysis of employment and wages.

Both the LFS and the CPS are panel surveys. In the LFS, households remain in the sample for a period of six months. In the CPS, households are sampled for an initial four months, excluded for a further eight months, and then return to the sample for another four months.

In the CPS, the questions on wages earned during the reference week are asked only at the end of each of the two periods when respondents are in the sample. The data files containing the information about these households when they leave the panel are called the ‘outgoing rotation group’ (ORG) files. These are the files used in this study. Lemieux (2006) shows that the wage information contained in these files is more reliable than that produced by CPS supplements conducted annually in March. These supplements also contain questions about the earnings and wages of respondents, but the questions pertain to the past year rather than the reference week.

Since wages are not disclosed beyond a certain value in the available ORG files, it is not possible to perform an analysis based on average wages. For this reason, median wages are used to document wage movements.

References

Bender, R. 2016. Measuring Employment and Unemployment in Canada and the United States—A Comparison. Labour Statistics: Technical Papers, no. 2015002. Statistics Canada Catalogue no. 75-005-M. Ottawa: Statistics Canada.

Bernard, A., and J. Usalcas. 2014. The Labour Market in Canada and the United States Since the Last Recession. Economic Insights, no. 36. Statistics Canada Catalogue no. 11-626-X. Ottawa: Statistics Canada.

Beaudry, P., D.A. Green and B. Sand. 2012. “Does industrial composition matter for wages? A test of search and bargaining theory.”  Econometrica 80 (3): 1063–1104.

Charles, K.K., E. Hurst, and M.J. Notowidigdo. 2016. “The masking of the decline in manufacturing employment by the housing bubble.” Journal of Economic Perspectives 30 (2): 179–200.

Lemieux, T. 2006. “Increasing residual wage inequality: Composition effects, noisy data or rising demand for skill?” The American Economic Review 96 (3): 461–498.

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